SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
INFORMATION STATEMENT
PURSUANT TO SECTION 14(C)
OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED
SCHEDULE 14C
(RULE 14C-101)
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934
Check the appropriate box:
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Preliminary Information Statement
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Definitive Information Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
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THE OLB GROUP, INC.
(Name of Registrant As Specified In Its Charter)
Payment of Filing Fee (Check the Appropriate
Box):
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Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which the transaction applies:
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(3)
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Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was
determined): __________
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(4)
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials
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check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount previously paid:
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(2)
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Form, Schedule or Registration Statement No.:
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THE
OLB GROUP, INC.
NOTICE OF STOCKHOLDER ACTION BY WRITTEN CONSENT
October __, 2019
Dear Stockholders:
We are furnishing the attached
Information Statement to the holders of common stock, par value $0.0001 per share (the “Common Stock”), of The OLB
Group, Inc., a Delaware corporation (the “Company,” “we,” “us” or “our”). The
purpose of the Information Statement is to notify stockholders that, in lieu of a special meeting of the stockholders of the Company,
and pursuant to the Delaware General Corporation Law (the “DGCL”), the Board of Directors of the Company (the “Board”)
and Ronny Yakov, the Chairman, Chief Executive Officer, President, Interim Chief Financial Officer, Secretary and sole Director
of the Company and the holder of approximately 64.27% of our outstanding Common Stock as of the record date (the “Voting
Stockholder), have taken and approved the following actions by written consent to approve an amendment to our Certificate of Incorporation,
as amended (the “Certificate of Incorporation”), to: (1) effect a reverse stock split of our issued and outstanding
Common Stock at a ratio between one-for-twenty and one-for-thirty five (the “Reverse Split”), with such final ratio
to be determined at the sole discretion of the Board (or its designee or designees) and with such Reverse Split to be effected
at such time and date, if at all, as determined by the Board in its sole discretion (provided that it is effected within one year
of the date on which the stockholders of the Corporation approve the Reverse Stock Split) and (2) include a provision to indemnify
the directors, officers, employees or other agents of the Company to the fullest extent permitted by the DGCL.
This notice and Information
Statement shall constitute notice to you of the Voting Stockholder taking action by written consent under Section 228 of the DGCL.
The accompanying Information
Statement is being provided to you for your information to comply with the requirements of Regulation 14C of the Securities Exchange
Act of 1934, as amended (“Exchange Act”). This Information Statement constitutes notice to you of the aforementioned
corporate actions to be taken without a meeting, by less than unanimous consent of our stockholders, pursuant to Section 228 of
the DGCL. You are urged to read this Information Statement carefully in its entirety. However, no action is required on your
part in connection with this document, including with respect to the approval of the Reverse Split. No meeting of our stockholders
will be held or proxies requested because we have received written consent to these matters from the Voting Stockholder who holds
a majority of the aggregate issued and outstanding shares of our voting stock.
Under Rule 14c-2(b) of
the Exchange Act, none of the actions described in the Information Statement may be taken earlier than 20 calendar days after we
have sent or given the Information Statement to our stockholders. We intend to distribute this Notice and Information Statement
to our stockholders on or about October __, 2019. The record date established for purposes of determining the number of issued
and outstanding shares of voting stock, and thus voting power, was October 4, 2019.
THIS IS FOR YOUR INFORMATION ONLY. YOU DO
NOT NEED TO DO ANYTHING IN RESPONSE TO THIS INFORMATION STATEMENT. THIS IS NOT A NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
AND NO STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
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Sincerely
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/s/ Ronny Yakov
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Name: Ronny Yakov
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Title: Chief Executive Officer
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THE
OLB GROUP, INC.
200 Park Avenue,
Suite 1700
New York, NY 10166
(212) 278-0900
INFORMATION STATEMENT
We Are Not Asking
You for a Proxy and
You Are Requested
Not To Send Us a Proxy
INTRODUCTION
This Information Statement
is being furnished to the stockholders of The OLB Group, Inc. (the “Company,” “we,” “us,” or
“our”) in connection with the actions to be taken by us as a result of a written consent in lieu of a special meeting
of stockholders pursuant to the Delaware General Corporation Law (the “DGCL”), dated October 4, 2019.
This Information Statement
and Notice of Stockholder Action by Written Consent is being furnished by us to our stockholders of record as of October 4, 2019
(the “Record Date”), to inform our stockholders that the Board of Directors of the Company (the “Board”)
and Ronny Yakov, the Chairman, Chief Executive Officer, President, Interim Chief Financial Officer, Secretary and sole Director
of the Company and the holder of approximately 64.27% of our outstanding Common Stock as of the Record Date (the “Voting
Stockholder), have taken and approved the following actions (the “Corporate Actions”) by written consent to approve
an amendment (the “Amendment”) to our Certificate of Incorporation, as amended (the “Certificate of Incorporation”),
to: (1) effect a reverse stock split of our issued and outstanding Common Stock at a ratio between one-for-twenty and one-for-thirty
five (the “Reverse Split”), with such final ratio to be determined at the sole discretion of the Board (or its designee
or designees) and with such Reverse Split to be effected at such time and date, if at all, as determined by the Board in its sole
discretion (provided that it is effected within one year of the date on which the stockholders of the Corporation approve the Reverse
Stock Split) and (2) indemnify the directors, officers, employees or other agents of the Company to the fullest extent permitted
by the DGCL (the “Indemnification Provision”).
This Information Statement
is being sent to you to notify you of the Corporate Action being taken by written consent in lieu of a special meeting of our stockholders.
On the Record Date, our Board and the Voting Stockholder, representing approximately 64.27% of the voting power of our Company
as of the Record Date, adopted and approved the Reverse Split, the Indemnification Provision and the Amendment.
The ability to proceed
without a special meeting of the stockholders to approve, adopt and/or ratify the Corporate Actions is authorized by Section 228
of the DGCL which provides that, unless otherwise provided in our Certificate of Incorporation and Bylaws, action required or permitted
to be taken at a meeting of our stockholders may be taken without a meeting if a written consent that sets forth the action so
taken is signed by stockholders holding at least a majority of the voting power of the Company, except that if a different proportion
of voting power is required for such an action at a meeting, then that proportion of written consents is required. Such consent
shall have the same force and effect as a majority vote of the stockholders and may be stated as such in any document. Our Certificate
of Incorporation and Bylaws do not contain any provisions contrary to the provisions of Section 228 of the DGCL. Thus, to eliminate
the costs to us and management time involved in holding a special meeting, and in order to take the Corporate Actions as described
in this Information Statement, one of our stockholders representing in excess of 50% of the voting stock executed and delivered
a written consent to us.
We are distributing this
Information Statement to our stockholders in full satisfaction of any notice requirements we may have under the DGCL and of Regulation
14C of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”).
This Information Statement
is dated as of and is first being sent or given to our stockholders of record on or about October __, 2019.
On the Record Date, there
were 162,350,364 shares of our Common Stock issued and outstanding and entitled to notice of and to vote on all matters presented
to stockholders. We do not have any shares of preferred stock issued and outstanding. The required vote for the adoption of the
Amendment and the approval of the Reverse Split and Indemnification Provision was a majority of the issued and outstanding shares
of Common Stock. On the Record Date, the Voting Stockholder, as the holder of record of approximately 64.27% of the outstanding
shares of our voting stock, executed a written consent adopting, approving and ratifying the Corporate Actions. When actions are
taken by written consent of less than all of the stockholders entitled to vote on a matter, Section 228 of the DGCL requires notice
of the action to those stockholders who did not vote. This Information Statement and the accompanying notice constitute notice
to you of action by written consent as required by Section 228 of the DGCL. Because we have obtained sufficient stockholder approval
of the Corporate Actions, no other consents or votes will be solicited in connection with this Information Statement.
WE ARE NOT ASKING YOU
FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
Under federal securities
laws, the Corporate Actions may not be completed until 20 calendar days after the date of distribution of this Information Statement
to our stockholders. Therefore, notwithstanding the execution and delivery of the written consent, the Corporate Actions will not
occur until that time has elapsed.
Dissenters’ Rights of Appraisal
Under the DGCL, Company
stockholders are not entitled to appraisal rights with respect to the Corporate Actions.
Security Ownership of Certain Beneficial Owners and Management
As
of the Record Date, the Company had 162,350,364 shares of Common Stock issued and outstanding. Holders of Common Stock are
entitled to one vote per share. The following table sets forth the beneficial ownership of the Common Stock as of the Record Date
by each person who served as a director and/or an executive officer of the Company on that date, the number of shares beneficially
owned by all of the Company’s directors and executive officers as a group, and any persons who beneficially own 5% or greater
of the Common Stock as of the Record Date. The address of each
holder listed below, except as otherwise indicated, is c/o The OLB Group, Inc., 200 Park Avenue, Suite 1700, New York, NY.
Name of Beneficial Owner
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Amount and
nature of
beneficial
ownership of
Common
Stock
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Approximate
percentage of
outstanding
Common Stock
(1)
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5% Beneficial Owners
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John Herzog (2)
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16,757,602
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10.6
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%
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Directors and Officers
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Ronny Yakov (3)
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104,407,546
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64.3
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%
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Rachel Boulds
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25,000
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*
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Patrick Smith (4)
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1,591,034
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1.0
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%
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All directors and executive officers as a group (3 persons)
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106,023,580
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64.7
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%
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(1)
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Beneficial ownership is determined in accordance with Rule 13d-3 under the Securities Exchange
Act of 1934, as amended, and is generally determined by voting powers and/or investment powers with respect to securities. Unless
otherwise noted, all of such shares of common stock listed above are owned of record by each individual named as beneficial owner
and such individual has sole voting and dispositive power with respect to the shares of common stock owned by each of them. Such
person or entity’s percentage of ownership is determined by assuming that any options or convertible securities held by such
person or entity, which are exercisable within sixty (60) days from the date hereof, have been exercised or converted as the case
may be, but not for the purposes of determining the number of outstanding shares held by any other named beneficial owner.
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(2)
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Includes 1,492,501 shares of common stock owned by Herzog & Co. and 855,719 shares of common
stock held by John E Herzog TTEE John E Herzog REV Trust U/A/D 02/07/2014. John Herzog is the Chairman of Herzog & Co. and
the trustee of the trust.
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(3)
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Includes 66,667 vested options.
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(4)
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Includes 1,591,034 vested options.
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DESCRIPTION OF
STOCKHOLDER ACTIONS – REVERSE SPLIT
Introduction
On October 4, 2019, our
Board approved, by unanimous written consent, to adopt the Amendment to our Certificate of Incorporation effecting a Reverse Split
of our issued and outstanding Common Stock at a ratio between one-for-twenty and one-for-thirty five, with such ratio to be determined
at the sole discretion of the Board (or its designee or designees) and with such Reverse Split to be effected at such time and
date, if at all, as determined by the Board in its sole discretion (provided that it is effected within one year of the date on
which the stockholders of the Corporation approve the Reverse Stock Split). On October 4, 2019, the Voting Stockholder, acting
by written consent, approved the Amendment and the Reverse Split.
Effecting the Reverse Split
requires that our Certificate of Incorporation be amended. The text that will be incorporated into our Certificate of Incorporation
upon effecting the Reverse Split is attached as Annex A to this Information Statement. The Amendment, which will
not be filed until at least twenty days following the date of this Information Statement, will be effective upon the filing of
such Amendment to the Certificate of Incorporation in the form attached as Annex A with the Secretary of State
of Delaware with such filing to occur, if at all, at the sole discretion of the Board.
There are two principal
reasons for the Reverse Split: (1) the Reverse Split should increase the stock price of our Common Stock, which is currently trading
on the Pink Open Market operated by OTC Markets Group Inc. (the “Pink Sheets”), to a level sufficiently above the minimum
bid price requirement that is required to list on either The Nasdaq Capital Market and the NYSE American LLC (the Nasdaq Capital
Market and the NYSE American LLC collectively referred to as the “Exchanges”) such that the Board, in its sole discretion,
may apply for initial listing on either of the Exchanges and (2) the Reverse Split may make it more feasible for the Company to
raise third party equity funding which we will need for business operations and as is required pursuant to the terms of that certain
$12,500,000 term loan that we received in April 2018.
Based on discussions with
our advisors, we believe the Reverse Split would increase our chances of raising funding by: (i) increasing the price of our Common
Stock to levels that might attract a broader audience of potential investors (as of October 1, 2019, the closing price of our Common
Stock was $0.40) and (ii) lower the number of our outstanding shares of Common Stock, resulting in a capitalization for our Company
that might attract a broader audience of potential investors.
One principal effect of
the Reverse Split would be to decrease the number of outstanding shares of our Common Stock. Except for de minimus adjustments
that may result from the treatment of fractional shares as described below, the Reverse Split will not have any dilutive effect
on our stockholders since each stockholder would hold the same percentage of our Common Stock outstanding immediately following
the Reverse Split as such stockholder held immediately prior to the Reverse Split. The relative voting and other rights that accompany
the shares of Common Stock would not be affected by the Reverse Split.
The table below sets forth
the number of shares of our Common Stock outstanding before and after the Reverse Split based on 162,350,364 shares of Common Stock
outstanding as of the Record Date.
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Prior to the
Reverse Split
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Assuming a
one-for-twenty
Reverse Split
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Assuming a
one-for-twenty-five
Reverse Split
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Assuming a
one-for-thirty
Reverse Split
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Assuming a
one-for-thirty five
Reverse Split
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Aggregate Number of Shares of Common Stock Outstanding
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162,350,364
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8,117,519
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6,494,015
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5,411,679
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4,638,582
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The Reverse Split will not have any impact on
the number of authorized shares of Common Stock provided for in our Certificate of Incorporation which shall remain at 200,000,000
shares.
Although the Reverse Split
will not have any dilutive effect on our stockholders, the proportion of shares owned by our stockholders relative to the number
of shares authorized for issuance will decrease because we will not be reducing out authorized shares of Common Stock. The additional
authorized but unissued shares may be used for various purposes, including, without limitation, raising capital, providing equity
incentives to employees, officers or directors, effecting stock dividends, establishing strategic relationships with other companies
and expanding our business through the acquisition of other businesses or products. We do not currently have any plans, proposals
or arrangements to issue any of the potentially newly available authorized shares that result from the Reverse Split for any purposes.
The Reverse Split is not part of a broader plan to take us private.
Reasons for the Reverse Split
The Board’s primary
objectives in effecting the Reverse Split, if necessary or if the Board otherwise desires, is to enable the Board to (i) raise
the per share trading price of our Common Stock, which is currently trading only on the Pink Sheets, to allow for a listing of
our Common Stock on one of the Exchanges and (ii) enable the Board to facilitate capital raising by the Company by attracting a
broader audience of potential investors.
Our Board has determined
that by increasing the market price per share of our Common Stock, we would meet the stock price element of the initial listing
requirements of each of the Exchanges and our Common Stock could be initially listed on one of the Exchanges. Our Board concluded
that the liquidity and marketability of our Common Stock will be adversely affected if it is not quoted on a national securities
exchange as investors can find it more difficult to dispose of, or to obtain accurate quotations as to the market value of, our
Common Stock. Our Board believes that current and prospective investors may view an investment in our Common Stock more favorably
if our Common Stock is quoted on one of the Exchanges.
Our Board also believes
that the Reverse Split and any resulting increase in the per share price of our Common Stock should enhance the acceptability and
marketability of our Common Stock to the financial community and investing public. Many institutional investors have policies prohibiting
them from holding lower-priced stocks in their portfolios, which reduces the number of potential buyers of our Common Stock. Additionally,
analysts at many brokerage firms are reluctant to recommend lower-priced stocks to their clients or monitor the activity of lower-priced
stocks. Brokerage houses frequently have internal practices and policies that discourage individual brokers from dealing in lower-priced
stocks. Further, because brokers’ commissions on lower-priced stock generally represent a higher percentage of the stock
price than commissions on higher priced stock, investors in lower-priced stocks pay transaction costs which are a higher percentage
of their total share value, which may limit the willingness of individual investors and institutions to purchase our Common Stock.
While we believe that we
will likely implement the Reverse Split in connection with a contemplated uplisting onto an Exchange and subsequent financing activities,
we cannot assure you that the Board will ultimately determine to effect the Reverse Split or if effected, at what ratio it will
be effected or that the Reverse Split will have any of the desired effects described above. More specifically, we cannot assure
you that after the Reverse Split the market price of our Common Stock will increase proportionately to reflect the ratio for the
Reverse Split, that the market price of our Common Stock will not decrease to its pre-split level, or that our market capitalization
will be equal to the market capitalization before the Reverse Split.
Potential Disadvantages of the Reverse Split
As noted above, the principal
purpose of the Reverse Split would be to help increase the per share market price of our Common Stock by up to a factor of thirty.
We cannot assure you, however, that the Reverse Split will accomplish this objective for any meaningful period of time. While we
expect that the reduction in the number of outstanding shares of Common Stock will increase the market price of our Common Stock,
we cannot assure you that the Reverse Split will increase the market price of our Common Stock by an equivalent multiple, or result
in any permanent increase in the market price of our Common Stock. The price of our Common Stock is dependent upon many factors,
including our business and financial performance, general market conditions and prospects for future success. If the per share
market price does not increase proportionately as a result of the Reverse Split, then the value of our Company as measured by our
stock capitalization will be reduced, perhaps significantly.
The number of shares held
by each individual stockholder would be reduced if the Reverse Split is implemented. This will increase the number of stockholders
who hold less than a “round lot,” or 100 shares. This has two disadvantages. First, each of the Exchanges requires
that we have a certain number of round lot stockholders to be initially listed (the Nasdaq Marketplace Rules require that we have
300 round lot stockholders and the NYSE MKT LLC requires that we have 400 round lot stockholders). Second, the transaction
costs to stockholders selling “odd lots” are typically higher on a per share basis. Consequently, the Reverse Split
could increase the transaction costs to existing stockholders in the event they wish to sell all or a portion of their position.
Although our Board believes
that the decrease in the number of shares of our Common Stock outstanding as a consequence of the Reverse Split and the anticipated
increase in the market price of our Common Stock could encourage interest in our Common Stock and possibly promote greater liquidity
for our stockholders, such liquidity could also be adversely affected by the reduced number of shares outstanding after the Reverse
Split.
Effecting the Reverse Split
Any time twenty calendar
days following the date of this Information Statement, if our Board concludes that it is in the best interests of our Company and
our stockholders to effect the Reverse Split, the Amendment will be filed with the Secretary of State of Delaware. The actual timing
of the filing of the Amendment with the Secretary of State of Delaware to effect the Reverse Split will be determined by our Board
(provided that it is effected within one year of the date on which the stockholders of the Corporation approve the Reverse Stock
Split). In addition, if for any reason our Board deems it advisable to do so, the Reverse Split may be abandoned at any time prior
to the filing of the Amendment, without further action by our stockholders. The Reverse Split will be effective as of the date
of filing with the Secretary of State of Delaware (the “Effective Time”). Upon the filing of the Amendment, without
further action on our part or our stockholders, the outstanding shares of Common Stock held by stockholders of record as of the
Effective Time would be converted into a lesser number of shares of Common Stock based on a Reverse Split ratio as determined by
the Board. For example, if you presently hold 1,500 shares of our Common Stock, you would hold 50 shares of our Common Stock following
the Reverse Split if the ratio is one-for-thirty or you would hold 75 shares of our Common Stock following the Reverse Split if
the ratio is one-for-twenty.
Effect on Outstanding Shares, Options and Certain Other Securities
If the Reverse Split is
implemented, the number of shares our Common Stock owned by each stockholder will be reduced in the same proportion as the reduction
in the total number of shares outstanding, such that the percentage of our Common Stock owned by each stockholder will remain unchanged
except for any de minimus change resulting from rounding up to the nearest number of whole shares so that we are not obligated
to issue cash in lieu of any fractional shares that such stockholder would have received as a result of the Reverse Split. The
number of shares of our Common Stock that may be purchased upon exercise of outstanding options or other securities convertible
into, or exercisable or exchangeable for, shares of our Common Stock, and the exercise or conversion prices for these securities,
will also be ratably adjusted in accordance with their terms as of the Effective Time.
Effect on Registration and Stock Trading
We are subject to the periodic
reporting and other requirements of the Exchange Act. The proposed Reverse Split will not affect the registration of our Common
Stock. If the proposed Reverse Split is implemented and our application for initial listing is otherwise accepted on either of
the Exchanges, we will request that our Common Stock be initially listed under the symbol “OLB,” however we cannot
guarantee that the Exchanges will permit our use of “OLB.” If “OLB” is not available to us, we will announce
our new symbol as soon as practicable.
Fractional Shares; Exchange of Stock Certificates
Our Board does not currently
intend to issue fractional shares in connection with the Reverse Split. Therefore, we do not expect to issue certificates representing
fractional shares. In lieu of any fractional shares, we will issue to stockholders of record who would otherwise hold a fractional
share because the number of shares of Common Stock they hold before the Reverse Split is not evenly divisible by the Reverse Split
ratio that number of shares of Common Stock as rounded up to the nearest whole share. For example, if a stockholder holds 150.25
shares of Common Stock following the Reverse Split, that stockholder will receive certificate representing 151 shares of Common
Stock. No stockholders will receive cash in lieu of fractional shares.
As of the Record Date,
we had 373 holders of record of our Common Stock (although we have significantly more beneficial holders). We do not expect the
Reverse Split and the rounding up of fractional shares to whole shares to result in a significant reduction in the number of record
holders. We presently do not intend to seek any change in our status as a reporting company for federal securities law purposes,
either before or after the Reverse Split.
On or after the Effective
Time, we will mail a letter of transmittal to each stockholder. Each stockholder will be able to obtain a certificate evidencing
his, her or its post-Reverse Split shares only by sending the exchange agent (who will be the Company’s transfer agent) the
stockholder’s old stock certificate(s), together with the properly executed and completed letter of transmittal and such
evidence of ownership of the shares as we may require. Stockholders will not receive certificates for post-Reverse Split shares
unless and until their old certificates are surrendered. Stockholders should not forward their certificates to the exchange agent
until they receive the letter of transmittal, and they should only send in their certificates with the letter of transmittal. The
exchange agent will send each stockholder, if elected in the letter of transmittal, a new stock certificate after receipt of that
stockholder’s properly completed letter of transmittal and old stock certificate(s). A stockholder that surrenders his, her
or its old stock certificate(s) but does not elect to receive a new stock certificate in the letter of transmittal will be deemed
to have requested to hold that stockholder’s shares electronically in book-entry form with our transfer agent.
Certain of our registered
holders of Common Stock hold some or all of their shares electronically in book-entry form with our transfer agent. These stockholders
do not have stock certificates evidencing their ownership of our Common Stock. They are, however, provided with a statement reflecting
the number of shares registered in their accounts. If a stockholder holds registered shares in book-entry form with our transfer
agent, the stockholder may return a properly executed and completed letter of transmittal.
Stockholders who hold shares
in street name through a nominee (such as a bank or broker) will be treated in the same manner as stockholders whose shares are
registered in their names, and nominees will be instructed to effect the Reverse Split for their beneficial holders. However, nominees
may have different procedures and stockholders holding shares in street name should contact their nominees. Stockholders will not
have to pay any service charges in connection with the exchange of their certificates.
Authorized Shares
The Reverse Split will
not have any effect on the authorized number of shares of our Common Stock which is currently 200,000,000 shares. In accordance
with our Certificate of Incorporation and Delaware law, our stockholders do not have any preemptive rights to purchase or subscribe
for any of our unissued or treasury shares.
Anti-Takeover and Dilutive Effects
As previously described,
although the Reverse Split will not have any dilutive effect on our stockholders, the proportion of shares owned by our stockholders
relative to the number of shares authorized for issuance will decrease because we will not be reducing out authorized shares of
Common Stock. The additional shares of Common Stock that are authorized but unissued provide our Board with flexibility to effect,
among other transactions, public or private refinancings, acquisitions, stock dividends, stock splits and the granting of equity
incentive awards. However, these authorized but unissued shares may also be used by our Board, consistent with and subject to its
fiduciary duties, to deter future attempts to gain control of us or make such actions more expensive and less desirable. The Reverse
Split will give our Board authority to issue additional shares from time to time without delay or further action by the stockholders
except as may be required by applicable law or the rules of the Exchanges. The Reverse Split is not being recommended in response
to any specific effort of which we are aware to obtain control of us, nor does our Board have any present intent to use the authorized
but unissued Common Stock to impede a takeover attempt. There are no plans or proposals to adopt other provisions or enter into
any arrangements that have material anti-takeover effects.
In addition, the issuance
of additional shares of Common Stock for any of the corporate purposes listed above could have a dilutive effect on earnings per
share and the book or market value of our outstanding Common Stock, depending on the circumstances, and would likely dilute a stockholder’s
percentage voting power in us. Holders of our Common Stock are not entitled to preemptive rights or other protections against dilution.
Our Board intends to take these factors into account before authorizing any new issuance of shares.
Accounting Consequences
As of the Effective Time,
the stated capital attributable to Common Stock on our balance sheet will be reduced proportionately based on the Reverse Split
ratio (including a retroactive adjustment of prior periods), and the additional paid-in capital account will be credited with the
amount by which the stated capital is reduced. Reported per share net income or loss will be higher because there will be fewer
shares of our Common Stock outstanding.
Federal Income Tax Consequences
The following summary describes
certain material U.S. federal income tax consequences of the Reverse Split to holders of our Common Stock. This summary addresses
the tax consequences only to a beneficial owner of our Common Stock that is a citizen or individual resident of the United States,
a corporation organized in or under the laws of the United States or any state thereof or the District of Columbia or otherwise
subject to U.S. federal income taxation on a net income basis in respect of our Common Stock (a “U.S. holder”). This
summary does not address all of the tax consequences that may be relevant to any particular stockholder, including tax considerations
that arise from rules of general application to all taxpayers or to certain classes of taxpayers or that are generally assumed
to be known by investors. This summary also does not address the tax consequences to persons that may be subject to special treatment
under U.S. federal income tax law or persons that do not hold our Common Stock as “capital assets” (generally, property
held for investment). This summary is based on the provisions of the Internal Revenue Code of 1986, as amended, U.S. Treasury regulations,
administrative rulings and judicial authority, all as in effect as of the date hereof. Subsequent developments in U.S. federal
income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material
effect on the U.S. federal income tax consequences of the Reverse Split. Each stockholder should consult his, her or its own
tax advisor regarding the U.S. federal, state, local and foreign income and other tax consequences of the Reverse Split.
If a partnership (or other
entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our Common Stock, the U.S.
federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities
of the partnership. Partnerships that hold our Common Stock, and partners in such partnerships, should consult their own tax advisors
regarding the U.S. federal income tax consequences of the Reverse Split.
The Reverse Split should
be treated as a recapitalization for U.S. federal income tax purposes. Therefore, no gain or loss should be recognized by a U.S.
holder upon the Reverse Split. Accordingly, the aggregate tax basis in the Common Stock received pursuant to the Reverse Split
should equal the aggregate tax basis in the Common Stock surrendered and the holding period for the Common Stock received should
include the holding period for the Common Stock surrendered.
DESCRIPTION OF
STOCKHOLDER ACTIONS – INDEMNIFICATION
Introduction
On October 4, 2019, our
Board approved, by unanimous written consent, to adopt the Indemnification Provision and Amendment to our Certificate of Incorporation
to more fully indemnify the directors, officers, employees or other agents of the Company to the fullest extent permitted by the
DGCL. On October 4, 2019, the Voting Stockholder, acting by written consent, approved the Indemnification Provision and Amendment.
Implementing the Indemnification
Provision requires that our Certificate of Incorporation be amended. The text that will be incorporated into our Certificate of
Incorporation upon effecting the Amendment is attached as Annex A to this Information Statement. The Amendment,
which will not be filed until at least twenty days following the date of this Information Statement, will be effective upon the
filing of such Amendment to the Certificate of Incorporation in the form attached as Annex A with the Secretary
of State of Delaware.
Reasons for the Indemnification Provision
The Board and the Voting
Stockholder approved the Indemnification Provision and Amendment to better protect the rights and interests of the Company’s
directors, officers, employees or other agents (the “Indemnitees”) and to better attract and retain the best available
personnel available to the Company. The Board believes that the Indemnification Provisions included in the Amendment are customary
for a Delaware corporation and particularly a Delaware corporation that is seeking a potential listing on an Exchange.
The following is a summary of some of the material changes to our Certificate of Incorporation that are included in the Amendment
as they relate to the Indemnification Provisions (please see Annex A attached to this Information Statement for the entire
language of the Amendment):
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Advancement
of Expenses. The Company shall advance the payment of expenses (including, without
limitation, attorneys’ fees) incurred against any Indemnitee in defending any civil,
criminal, administrative, or investigative action, suit or proceeding for which such
Indemnitee may be entitled to indemnification in advance of a final disposition of any
matter and such undertaking may be made without reference to the financial ability of
the Indemnitee to remake the payment upon receipt of an undertaking by or on behalf of
such Indemnitee to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified as authorized by the Amendment.
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Subsequent
Amendment. No amendment, termination or repeal of the indemnification provisions
in the Certificate of Incorporation or of the relevant provisions of the DGCL or any
other applicable laws shall affect or diminish in any way the rights of any Indemnitee
to receive indemnification.
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ANNUAL REPORT ON FORM 10-K AND ADDITIONAL
INFORMATION
Information Available
The Company is subject
to the information and reporting requirements of the Exchange Act and in accordance with the Exchange Act, the Company files periodic
reports, documents and other information with the SEC relating to its business, financial statements and other matters, including
the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, and any reports prior to or subsequent to
that date.
These reports and other
information filed by the Company with the SEC may be inspected and are available for copying at the public reference facilities
maintained at the SEC at 100 F Street NW, Washington, D.C. 20549.
The Company’s filings
with the SEC are also available to the public from the SEC’s website, http://www.sec.gov. The Company’s
Annual Report on Form 10-K for the year ended December 31, 2018, and other reports filed under the Exchange Act, are also available
to any stockholder at no cost upon request to: 200 Park Avenue, Suite 1700, New York, NY 10166.
Stockholder Communications
Stockholders wishing to
communicate with the Board may direct such communications to the Board c/o the Company, Attn: Ronny Yakov. Mr. Yakov will present
a summary of all stockholder communications to the Board at subsequent Board meetings. The directors will have the opportunity
to review the actual communications at their discretion.
Delivery Of Documents To Security Holders Sharing An Address
If hard copies of the materials
are requested, we will send only one Information Statement and other corporate mailings to stockholders who share a single address
unless we received contrary instructions from any stockholder at that address. This practice, known as “householding,”
is designed to reduce our printing and postage costs. However, the Company will deliver promptly upon written or oral request a
separate copy of the Information Statement to a stockholder at a shared address to which a single copy of the Information Statement
was delivered. You may make such a written or oral request by (a) sending a written notification stating (i) your name, (ii) your
shared address and (iii) the address to which the Company should direct the additional copy of the Information Statement, to the
Company at 200 Park Avenue, Suite 1700, New York, NY 10166.
If multiple stockholders
sharing an address have received one copy of this Information Statement or any other corporate mailing and would prefer the Company
to mail each stockholder a separate copy of future mailings, you may send notification to or call the Company’s principal
executive offices. Additionally, if current stockholders with a shared address received multiple copies of this Information Statement
or other corporate mailings and would prefer the Company to mail one copy of future mailings to stockholders at the shared address,
notification of such request may also be made by mail or telephone to the Company’s principal executive offices.
By Order of the Board of Directors
/s/
Ronny Yakov
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Name: Ronny Yakov
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Title: Chairman
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Annex A
CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF INCORPORATION
OF THE OLB GROUP, INC.
The undersigned, for the purposes of amending
the Certificate of Incorporation of The OLB Group, Inc. (the “Corporation”), a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”), does hereby certify that:
FIRST: The Board
of Directors of the Corporation (the “Board”) duly adopted by written consent
filed with the minutes of the Board in accordance with Section 141(f) of the DCGL on October 4, 2019, a resolution
proposing and declaring advisable an amendment to the Certificate of Incorporation of said Corporation to consummate a reverse
stock split of the Corporation’s common stock, par value $0.01 per share (the “Common Stock”) and to add a new
Article XI of the Certificate of Incorporation of said Corporation.
SECOND: That upon the effectiveness of this Certificate
of Amendment (the “Split Effective Time”) each share of the Common Stock issued and outstanding immediately prior
to the date and time of the filing hereof with the Secretary of State of Delaware shall be automatically changed and reclassified
into a smaller number of shares such that each _____ (__) shares of issued Common Stock immediately prior to the Split Effective
Time is reclassified into one share of Common Stock. Notwithstanding the immediately preceding sentence, there shall be no fractional
shares issued and, in lieu thereof, a holder of Common Stock on the Split Effective Time who would otherwise be entitled to a
fraction of a share as a result of the reclassification, following the Split Effective Time, shall receive a full share of Common
Stock upon the surrender of such stockholders' old stock certificate. No stockholders will receive cash in lieu of fractional
shares.
THIRD: That upon the effectiveness of
this Certificate of Amendment, there shall be a new Article XI of the Certificate of Incorporation of said Corporation as follows:
“ARTICLE XI
The Corporation, to the full extent permitted
by Section 145 of the General Corporation Law of the State of Delaware, as amended from time to time (“DGCL”), shall
indemnify all persons whom it may indemnify pursuant thereto. Expenses (including, without limitation, attorneys’ fees) incurred
by an officer or director in defending any civil, criminal, administrative, or investigative action, suit or proceeding for which
such officer or director may be entitled to indemnification hereunder shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of such director or officer to repay
such amount if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation as authorized hereby.
Any repeal or modification of this Article XI by the stockholders of the Corporation or any repeal or modification of the relevant
provisions of the DGCL shall not adversely affect any right or protection of a person or entity entitled to indemnification hereunder
with respect to events occurring prior to the time of such repeal or modification. For purposes of this Article XI, references
to “the Corporation” shall include, in addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have
had power and authority to indemnify its directors, officers, employees, fiduciaries and agents, so that any person or entity who
is or was a director, officer, employee, fiduciary or agent of such constituent corporation, or is or was serving at the request
of such constituent corporation as a director, officer, employee, fiduciary or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under this Article XI with respect to the resulting or surviving
corporation as he, she or it would have with respect to such constituent corporation if its separate existence had continued. The
rights to indemnification and the payment of expenses incurred in defending a proceeding in advance of its final disposition conferred
in this Article XI shall not be exclusive of any other right which any person or entity may have or hereafter acquire under any
statute, provision of this certificate of incorporation, By-law, agreement, vote of stockholders or disinterested directors or
otherwise.”
FOURTH: That
in lieu of a meeting and vote of the stockholders of the Corporation (the “Stockholders”), the Stockholders
have given written consent to said amendments in accordance with the provisions of Section 228 of the DGCL, and written notice
of the adoption of the amendments has been given as provided in Section 228 of the DGCL to every stockholder entitled to such
notice.
FIFTH: The aforesaid amendment was duly
adopted in accordance with the applicable provisions of Section 242 of the DGCL.
SIXTH: The aforesaid amendment shall
be effective as of 9:00 A.M. Eastern Standard Time on _________, 2019.
IN WITNESS WHEREOF, the Corporation has caused
this Amendment to the Certificate of Incorporation of the Corporation to be duly executed by the undersigned this ____ day of ___________,
2019.
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THE
OLB GROUP, INC.
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Name:
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Ronny
Yakov
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Title:
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Chief
Executive Officer
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